Do You Need to File an Emergency Bankruptcy?

September 6th, 2009 by Reed Allmand

As we often discuss on this blog, many debtors wait to the absolute last minute to file for bankruptcy.  They wait until the foreclosure has been posted or until after the credit card company has begun garnishing their wages.  What a huge mistake! Fortunately, for those who procrastinate, the bankruptcy code allows a debtor access to an emergency bankruptcy filing process.  An emergency bankruptcy filing allows the debtor and their bankruptcy attorney to file an abridged version of the bankruptcy paperwork.  The bankruptcy paperwork usually surpasses 40 pages, while an emergency bankruptcy filing includes just the first two pages, with the stipulation that the remaining paperwork will be submitted within 15 days after the emergency bankruptcy filing.

However, if the debtor and their bankruptcy attorney fail to file the remaining bankruptcy paperwork within 15 days, the bankruptcy court may dismiss the case.  If your emergency bankruptcy filing is dismissed, you may face difficulties when attempting to re-file the bankruptcy case.  The bankruptcy code stipulates that if a debtor files bankruptcy again within a year, the automatic stay will only remain in place for 30 days.  In order to extend the automatic stay the debtor will need to appear before the bankruptcy court and argue why the automatic stay should be extended.  The bankruptcy court does not always extend the automatic stay in the 2nd bankruptcy filing.  It is important to follow-up with all the paperwork in the first bankruptcy filing if you want to receive the full benefits of bankruptcy’s automatic stay.  In other words, do not file an emergency bankruptcy and fail to provide the bankruptcy attorney with the required information to complete the paperwork.  Failing to provide your bankruptcy attorney with the necessary information to complete the bankruptcy paperwork within 15 days could cause your case to be dismissed and restrict your access to bankruptcy benefits in a 2nd filing.

About Reed Allmand

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Allmand's vision is rooted in his own financially precarious childhood in Abilene "My father always had difficulty holding a job and supporting our family, so after my parents divorced when I was 12, my sister and I got jobs to help make ends meet," he recalls. "I remember what it felt like as a child to worry that our car would be repossessed or home foreclosed on."

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